Reply to: Change to contract payment terms

[Emperor Dalek]

My largest direct client's rule is payment the last day of the month following the month that the date 30 days after receipt of invoice falls in.

Take it or leave it.

[tim123]

I would expect that the clients actual change in contract terms is that any invoices received after the 14 days are not paid/processed until the following month (my current client gives the agency 4 days for this - so the agency invoices on estimated figures and balances over the months).

The threat to not pay at all is a dumb way of trying to scare you into complying.

My agent's got this dumb (in the sense of unchangable) rule that if I don't get my invoice in by the correct date (2 days after month end FFS) I don't get paid for another 30 days.

That clause is going at renewall.

tim

[rootsnall]

How big is the agency ? It doesn't sound like it in this case but when agents start tinkering with payment terms it is a sign that there are cashflow problems and its time to be wary.

[SameOldStory]

I would expect that the clients actual change in contract terms is that any invoices received after the 14 days are not paid/processed until the following month (my current client gives the agency 4 days for this - so the agency invoices on estimated figures and balances over the months).

The threat to not pay at all is a dumb way of trying to scare you into complying.

[XperTest]

I would be interested in knowing the client and the agency as well. If they're household names it would be interesting to start a campaign to not pay any of their invoices after x number of days, see what their lawyers would have to say about that..

[tim123]

As above,

It's perfectly clear why the agent are doing this.

It's also perfectly clear that such a restriction will have no enforcable effect on the relationship between you and the agency, or the agency and the client.

So I'm back to the numpty client question. Why on earth does the client think that "If you don't invoice us within 14 days of end of month, we don't have to pay, EVER" is enforcable?

tim

[XperTest]

They can request to change the contract terms all they want, the original contract is as much binding to them as it is to you, so they seem to have dug a hole for themselves if they've agreed this with the customer before/without getting things sorted with the contractors first. Besides that, it's a ridiculous suggestion anyway to not process any invoices over 14 days old.

[Mordac]

Name & shame (client and agency). You might even be able to threaten them with the DTI.

[teejaydee]

Thank you all for the useful advice. I think the problem stems from the fact that the agency wishes to remain on the client's approved supplier list. In order to do this they were apparently told by the client they would have to submit their invoice within fourteen days, or else the client would not pay it. They are now seeking to pass this time limit on to all the contractors on site (it's not just me!).

Obviously this suits the agency - they just invoice the client based on the invoices received from contractors on or before the cut-off date. They are trying to remove the risk of having to pay late-received invoices from contractors without being able to invoice the client for these, by changing the contract wording.

[BoredBloke]

At the end of the day your contract is with the agency. Who cares how long it takes for them to collect their money. Just because the payment terms on their contract has changed, why should you accept a change in yours. Also given the short timescale (14 days) you could lead yourself open to the agent pretending that they have not recieved your invoice and witholding payment.

As i said earlier, tell them where to go - Unless they are prepared to make it worth your while!!

[Mordac]

It'd be interesting to see whether the client tries to delay signing timesheets (manager on holiday etc). The agency cannot change any clauses without your agreement, and certainly can't refuse to pay an invoice submitted more than 14 days after the period in question. I think you need to reply politely saying "The Directors of xxx Ltd have considered your request to change the payment terms of the contract dated xxxxx, however on this occasion we have decided this would not be in the commercial interests of xxx Ltd to agree to such changes. We therefore consider the original contract of xxxxx to remain in force for the duration."

And see what they do about that.

[tim123]

I would have thought it is the agent (unsurprisingly) being the numpty if they have agreed to these newly imposed payment terms and now trying to impose them on their contractors to waive the risk that they have taken.. It seems to me the client can only win here, and whoever is silly enough to agree with these terms may lose out.

I agree that the agent is being a numpty by accepting these terms.

But I still think that the client is a numpty for asking. Even if the agent says yes, he will still have the right to go to court to get the clause voided. IMHO he will win and the client should realise this. Asking for a contract change that can ultimately be enforced is a waste of everybody's time.

tim

[XperTest]

Even if it was possible for the agency to change a contract mid term, I doubt that this change would be allowed.

There is a six year statutory limit on the collection of a debt. Whilst it is reasonable for a company to place some restrictions on stale invoices I can't see a judge accepting 14 days as reasonable, even in a B2B contract.

Which means, of course, that the change the client have imposed upon the agency is equally invalid. Any reasonable sized corporate would know this so I do wonder what type of numpty you have for an end client (unless the agency have made up the reason).

tim

I would have thought it is the agent (unsurprisingly) being the numpty if they have agreed to these newly imposed payment terms and now trying to impose them on their contractors to waive the risk that they have taken.. It seems to me the client can only win here, and whoever is silly enough to agree with these terms may lose out.

[tim123]

Even if it was possible for the agency to change a contract mid term, I doubt that this change would be allowed.

There is a six year statutory limit on the collection of a debt. Whilst it is reasonable for a company to place some restrictions on stale invoices I can't see a judge accepting 14 days as reasonable, even in a B2B contract.

Which means, of course, that the change the client have imposed upon the agency is equally invalid. Any reasonable sized corporate would know this so I do wonder what type of numpty you have for an end client (unless the agency have made up the reason).

tim

[BoredBloke]

Tell them where to go. They can't impose a change on you unless you agree bto it. On that basis they could simply turn round and say that they now want to pay you £10 per day - you wouldn't be obliged to take that either.